Can Borders Be The Next Amazon.com?

from the doubtful dept

In an interview with the Wall Street Journal, George Jones, the CEO of Borders, discusses his company's plans to remain relevant as more and more commerce is done online. Borders' story is an interesting one, in that its struggles are being felt by a wide variety of traditional retailers right now. Jones' insights into the changing nature of e-commerce is interesting. He notes that when Borders first decided to sell online, it pretty much had to partner with Amazon, because of the infrastructure that it had built up. Now, however, options for third-party fulfillment (also an area that Amazon is interested in) will allow Borders to launch its own site (whether it's able to gain any traction remains to be seen). That being said, parts of his vision seems a little off. He imagines that one day customers will come into the store to buy digital goods, like music and e-books, an idea reminiscent of Starbucks' ill-conceived fill up stations, where customers could get music for their MP3 players. The idea of tying a digital good to a physical location is not a model that customers are likely to embrace. Ultimately, there's no easy answer for a company like Borders. It can embrace the internet all it wants, but it's hard to see its fortunes being tied to much else than the continued success of selling physical books in actual stores.

Well, what they should do is leverage their physical location to be a better online seller. Like, sell books online (doesn't seem that hard, as people that usually buy from them physically are likely to google their website, maybe it won't match Amazon, but it'll be something) and then allow pick-up, or optionally return at the store. Particularly if they could get shipping to their stores (from their warehouses) quicker or easier, say. Often, I will suddenly finish a novel, need another, I'm going to run to the store, cuz I can't live a few days without a book. So wouldn't it be awesome if I could search a particular stores inventory online, so I know what they have?

I agree with Matt that online and offline interactions with Borders should be seamless to the customer. In my experience, well-intentioned companies will try to brand their website and stores separately, which leads to confusion amongst customers about exactly what is available from each.
The interactions don't just have to go from online to offline though. Borders has a chance to innovate and provide real value to online shoppers with unique programs that leverage existing in-store events, promotions, trends, etc. I wish them luck.

You -can- search Borders Store inventory online - there's a link to it on their online, "Amazoned" presence - and it's fairly useful - particularly if you want to pick up a book that day. The problem with Borders' current online presence is that it completely lacks integration with the physical stores. You need to be able to order a book and then go pick it up - that day if it is in stock or the next day by delivery to the store.

I agree with the author of the article - people are unlikely to go to a store to get their digital media - duh. What would probably work though, is putting kiosks into a store so that people can order a book to a store for a hold. For years, bookstores have had "staff only" computers - it's time to have smaller, more accessible kiosks - perhaps even end-capped "jukeboxes" geared towards the subject area they are located in. Better yet - they should also deliver a few "you might also be interested in" selections at the same time and them to you for review when you come to get the book you ordered. That's the key to profit -someone comes into your store looking for one item and walks out with two or three.

He's almost on the right track with his idea to sell digital goods in a physical store, but he just misses it. When you compare a company like Borders to a company like Amazon, you see that each has something the other lacks. Amazon has an impressive e-commerce presence as well as logistical and fulfillment systems. Borders has numerous physical stores and the associated distribution system. In the long run it will be a lot easier for Borders to build up a web presence capable of rivaling Amazon than it will be for Amazon to build a network of physical stores capable of rivaling Borders.

Of course, the just building the infrastructure guarantees success to neither party. Trends in this and other industries make the web presence appear to be more valuable, even though it costs much less to establish. The point here is that the barrier for Borders compete on Amazon's turf is much lower than it is for Amazon to compete on Borders'.

If Borders can build an e-commerce engine to match Amazon that at the same time leverages their physical outlets in a way that Amazon will have a hard time matching, then Borders could be a good bet in the long run. I can immediately think of several ways to do that:

1) They could use their physical locations to provide a kind of distributed warehousing system that could yield faster shipping times for less money.
2) Items on the Borders site could be marked "Get it Today", with the idea that the customer can buy it online and go pick it up at a store the same day with it already paid for, wrapped up, and ready to go.
3) Borders can leverage their existing distribution network for getting books to stores to provide free or very low cost shipping for items if the customer can pick it up in the store. Many "big-box" stores already do this.
4) Tie in-store purchases to online discounts and vice/versa.

To defend against this, Amazon has done a few things that won't work well with the above strategy:
1) Used books- Borders will have a hard time keeping a good used book stock in physical locations.
2) Other products. Amazon has a lot more than just books, some of them things that would look very odd sitting in a bookstore.

But I don't see why Borders.com couldn't also have these products, just list them as web-only. It again comes down to the idea that Borders can build an Amazon much more easily than Amazon can build a Borders.

Borders and B&N

Ugh, I used to own a bookstore and Borders is going to have some SERIOUS trouble getting more market share, and even holding what they have. Stocked with over-priced books and bored clerks who are under-paid and not knowledgeable in the areas of books, stores like Borders and B&N are going to have an extremely difficult time fighting against Amazon. I now buy all my books from Amazon. The ONLY way Borders or B&N could compete with Amazon is to have people well-versed in their products (more so than the average reader) and to have no shipping costs. Maybe an invention that let a book be automatically constructed by robot assembly in a store and sold for cheap would be the answer, as that is the only thing I could think of to draw me to a store (buy it the same day and get it that day, cheap). However, I do like going to B&N for their huge magazine section. You need people to WANT to come to your store: how about free coffee or something else that could draw customers??? They used to discount books and magazines an average of 10-30% off the cover price but no longer do this, so I stopped going after that. B&N also had this nifty free little magazine that gave synopsis of new books that came out but they stupidly stopped doing that. That little booklet was a real draw for me! GRR. Anyways, good luck. D

Beware the TRU way

Toys R Us had a pretty rough go at it when they broke free from Amazon and tried to reap the financial rewards of running your own e-commerce platform. I don't have any numbers, but while there site looks nice, they're sales took a nose-dive. (I think) Of course, TRU has many more problems them someone like Borders.

Borders is obviously a stronger player in the field, so I think if anyone can pull it off, they can. I really think if they can integrate their physical presence, with their virtual presence, they can maintain themselves successfully, and retain a portion of the market. The biggest thing to me, is in-store pickup. With books, this is key. I think the practice in general is picking up steam, and to offer it in the book world, is huge. They have enough stores to make it an attractive option. Nobody would rather wait and pay for the shipping instead of stopping off and picking it up on the way home, as long as the prices are comparable.

Bottom line, this is something that Borders must do in order to grow. Partnering with Amazon was a fantastic way to gain online presence, but eventually, they need to go it alone in order to be successful. The sooner the better, as the market keeps growing.

I wish them good luck.

Also, someone mentioned they need to tie in online promos with physical locations. I believe they already do that. If you are a Rewards member with Borders, you get weekly email promos that can be printed and used in-store. So they are on the right track at least.